Mr. Donald Ranta reports

RARE ELEMENT'S BEAR LODGE EXPLORATION ADVANCES RAPIDLY

Rare Element Resources Ltd. has provided a progress update on exploration activities at the Bear Lodge rare earth project and the Sundance gold project, both located in the Bear Lodge Mountains near Sundance, Wyo. Exploration activities at the Bear Lodge rare earth element (REE) and Sundance gold projects include core and reverse circulation drilling, trenching, geological mapping and surface sampling, and a detailed geophysical survey. Exploration work at the project site is expected to continue through November, 2011.

Rare Element's recent discoveries of rare earth mineralization in new areas peripheral to, and west of, the Bull Hill deposit show some overlap with areas of known gold mineralization. A fourth core drill rig was added to accelerate exploration in the outlying areas. Currently three core rigs are conducting dedicated REE exploration and resource definition, while the fourth will conduct gold, REE and geotechnical drilling. A reverse circulation (RC) drill rig continues to drill gold targets and may be transferred to the REE exploration program to collect bulk samples for metallurgical testing.

Jim Clark, vice-president of exploration, states: "We are extremely pleased at the progress made to date on the exploration program. We are adding to the Bull Hill resource, expanding and defining the Whitetail Ridge resource, and defining the nature and extent of heavy REE-enriched mineralization at Whitetail Ridge and the East Taylor target. We are tremendously appreciative of the hard work and dedication of our outstanding and dedicated professional and technical staff." Progress on the 2011 exploration programs for REE and gold is summarized below.

Drilling summary

Bear Lodge rare earth drilling

As of Sept. 19 the company has drilled 42 core holes for a total of 30,980.5 feet (9,445 m). The drilling was distributed as follows:

Bull Hill resource area/Bull Hill West target area:  23 drill holes/18,339 feet (5,591 m)

Whitetail Ridge:  12 drill holes/10,032 feet (3,059 m)

East Taylor:  Seven drill holes/2,607.5 feet (795 m)

The focus of the drilling in the Bull Hill resource area and Bull Hill West target area is the upgrade and expansion of the greater Bull Hill REE resource. The objective of the drilling at the Whitetail Ridge resource area is the definition and expansion of the current resource. Geological mapping and complementary geophysical and geochemical surveys all indicate that the Whitetail Ridge resource area has excellent potential for significant expansion.

Drilling at the East Taylor target area was undertaken to follow up on intercepts of high-grade REE mineralization identified in one of the company's 2010 gold exploration holes (SUN-090; see news release dated Aug. 4, 2011). RC holes drilled in 2010 at East Taylor (SUN-090) and Carbon (SUN-076 and SUN-079) and the Whitetail Ridge REE resource are notable in that they contain elevated abundances of heavy REE that are enriched significantly over the Bull Hill deposit REE distribution.

Bear Lodge rare earth drilling -- areas with significant HREE enrichment and receipt of additional assay data

Three areas in the western half of the Bear Lodge REE district contain elevated abundances of heavy REE (see table), as announced on Aug. 4, 2011. These areas are the Whitetail Ridge resource area and the Carbon and East Taylor targets. Seven additional drill holes were completed at the East Taylor target since Aug. 4 for a total of 2,609.5 feet (796 m) in order to confirm REE grade and distribution reported from reverse circulation drill hole SUN-090. Drill hole SUN-090 was drilled during the company's 2010 gold exploration program, and the included mineralized FMR (iron oxide-manganese oxide (FeOx-MnOx) REE) vein material was recognized during detailed logging of the drill chips. Two other historical drill holes with FMR mineralization and surface geology help to demonstrate mineralization continuity along an approximate east-west trend. Assays are pending. Drill testing of the Carbon REE target is planned for late October.

The quantitative REE assay results reported for drill hole SUN-090 in the Aug. 4, news release were for depth intervals from 45 to 100 feet (55 feet at 3.38 per cent total rare earth oxides (TREO)) and 105 to 160 feet (55 feet at 7.84 per cent TREO). The assay from the depth interval 100 to 105 feet had not been received at that time. The assay results are now complete, and the entire interval from 45 to 160 feet assays 5.94 per cent TREO. The recalculated assay interval with the new data for individual REO is reported in the attached table.

COMPARISON OF REO GRADES AT BULL HILL, WHITETAIL RIDGE, EAST TAYLOR AND CARBON



Area           Bull Hill  Whitetail          East Taylor              Carbon
                              Ridge                                         

Resource       Indicated   Inferred  Exploration/SUN090, Exploration/SUN079,
category rare                        45 -160' (115 feet)    15-45' (30 feet)
earth oxide                                                                

La2O3               1.08       0.81                 1.30                0.96
Ce2O3               1.64       1.19                 2.46                1.89
Pr2O3              0.186      0.158                 0.28                0.23
Nd2O3               0.65       0.64                 0.95                0.91
Sm2O3              0.099      0.142                 0.20               0.165
Eu2O3              0.021      0.042                0.060               0.040
Gd2O3              0.048      0.103                0.185               0.097
Tb2O3             0.0037     0.0115                0.027               0.013
Dy2O3             0.0104     0.0361                0.096               0.062
Y2O3               0.032      0.087                0.329               0.283
sigma Eu+Tb+Dy    0.0351      0.090                0.183               0.115
sigma              0.871      0.888                1.413               1.255
Nd+Pr+Eu+Tb+Dy                                                             
grade (%REO)        3.77       3.24                 5.94                4.69
Metric tonnes       4.45        1.5               ------              ------

Dr. Anthony N. Mariano is currently conducting mineralogical studies on mineralized FMR material from the East Taylor and Carbon target areas.

Reverse circulation drilling -- state lease section (Section 16)

Rare Element completed 11 reverse circulation drill holes for a total of 6,165 feet in its Wyoming state lease section (Section 16) since drilling began on June 25. The drilling tested several structural, geophysical and low-level gold geochemical anomalies. Assays are pending. The area is under consideration for a potential storage facilities for the proposed Bull Hill rare earth mine. The drilling, along with a series of geotechnical test pits, represents initial efforts to determine the potential for economic concentrations of gold and REE. Thus far, geological mapping and surface sampling present little evidence for underlying economic gold and REE deposits in Section 16.

Sundance gold project drilling

Thirteen reverse circulation drill holes totalling 6,230 feet (1,899 m) were completed on the Sundance project gold drilling program as of Sept. 19, 2011. Eleven holes (4,910 feet/1,497 m) were drilled on the Taylor resource area, and two holes (1,320 feet/402 m) were drilled at the Smith resource area. Drilling is continuing at the Smith resource area. Geological mapping and sampling of gold-anomalous areas are being carried out in support of the drilling and in order to identify new drill target areas.

Expected assay results

Rare Element anticipates release of the first batches of REE and gold assay results in October, 2011.

Trenching summary

Two sets of trenches, totalling approximately 2,000 feet (610 m), were developed across the Bull Hill REE deposit. The trenches were constructed in order to expose bedrock and obtain detailed structural information that will aid in understanding the structural controls of the REE-mineralized bodies. Dr. William Rehrig, a consulting structural geologist, was retained to map the trenches and interpret both detailed and district structural data. These data and interpretations will be incorporated into a predictive model of REE mineralization for the deposit and district, and will help guide district exploration and drilling.

Geophysical surveys

A CSAMT (controlled source audio magneto tellurics) survey was conducted along seven easterly trending lines (13.6 km). The survey covered the area from south of the Bull Hill diatreme to the northern margin of the Carbon diatreme. The objective of the survey is to identify structures that may control REE and/or gold mineralization. The data are in the process of interpretation and incorporation into the REE and gold exploration models.

Donald E. Ranta, PhD, PGeo, serves the board of directors of the company as an internal, technically qualified person. Technical information in this news release has been reviewed by Dr. Ranta and has been prepared in accordance with Canadian regulatory requirements that are set out in National Instrument 43-101. This news release was prepared by company management, who take full responsibility for content.